Tag Archives: Research and Development Tax Credit

The Importance of Integrity Within the Tax Consulting Industry

SAVAGE, Minn. /ScoopCloud/ -- Choosing a tax consulting firm as a trusted advisor is an exceptionally important decision for both businesses needing such services as well as accounting firms who refer them to their clients, says ICS Tax, LLC.

"The right firm can identify valuable credits and planning opportunities to reduce taxes as well as support their positions if audited. Recently, a national tax consulting firm was raided by the IRS Criminal Investigation agents specializing in tax violations and financial crimes. It is unfortunate to see that the IRS felt the need to take such drastic actions within our industry," said Alex Bagne, President of ICS Tax.

The right consultant can be your company's financial partner for life. Consider firms staffed with CPAs, attorneys, and licensed professionals as they can be your best choice. CPAs must follow the Code of Professional Conduct from the American Institute of Certified Public Accounting. Attorneys are governed by the state bar rules and statutes of professional conduct.

Certified Cost Segregation Professionals must abide by the code of ethics of American Society of Cost Segregation Professionals with integrity, honesty, and objectivity as their fundamental principles. Other licensed professionals, such as Professional Engineers and HERS Raters also must abide by codes of conduct.

At the very least when considering a tax consulting firm, first research them on the Internet. See if they have routinely lost tax court cases for overly aggressive positions, are frequently involved in employment lawsuits, or have been sued for racketeering, harassment, misconduct or other serious legal violations.

As tax consultants, ICS always looks after the public interest and honors their trust. The leaders at ICS include Certified Public Accountants, Attorneys, Certified Cost Segregation Professionals, HERS Raters, and Professional Engineers. We strongly advocate for our clients and provide comprehensive deliverables, including audit protection. ICS holds itself to the highest code of ethics established by both professional and industry standards.

ABOUT ICS TAX, LLC:

ICS Tax, LLC is a nationwide consulting firm providing innovative tax planning strategies. We collaborate with taxpayers and their advisors to identify credits and incentives that reduce tax liabilities and increase profitability. Visit https://ics-tax.com/ for more information regarding incentives such as the R&D credit, 179D deductions and many more.

Choosing a tax consulting firm as a trusted advisor is an exceptionally important decision for both businesses needing such services as well as accounting firms who refer them to their clients, says ICS Tax, LLC.

Related link: https://ics-tax.com/

IRS Mandates Additional Requirements for R&D Tax Credit Refund Claims

SAVAGE, Minn. /ScoopCloud/ -- In 2007, the IRS made the Research & Development (R&D) tax credit a Tier 1 issue, says ICS Tax, LLC (ICS). Tier 1 issues were those of high strategic importance that had a significant impact on one or more industries, essentially meaning that the IRS would audit taxpayers filing amended returns on such issues. To taxpayers' relief, the Tiered Issue Process was eliminated in 2012, effectively placing the R&D tax credit in the same audit pool as other issues.

After the IRS was defeated on two refund claims stating that the taxpayers' claims lacked specificity and they had failed to state a claim, the courts held that the IRS could no longer assert their own forms (Form 6765) were insufficient to constitute a refund claim.

As a result of losing these claims, the IRS announced in a Chief Counsel memo released October 15, 2021 that taxpayers seeking refunds attributable to the R&D tax credit must meet the following five requirements:

* Identify all the business components to which the research credit claim related for that year.

* For each business component:

- Identify all research activities performed;

- Identify all individuals who performed each research activity; and

- Identify all the information each individual sought to discover.

* Provide the total qualified employee wage expenses, total qualified supply expenses, and total qualified contract research expenses for the claim year. This may be done using Form 6765, Credit for Increasing Research Activities.

The new rules go into effect on January 10, 2022. The IRS has stated there will be a transition period for a year and a grace period, giving taxpayers 45 days (expanded from 30 days on January 5th) to "perfect" a claim for refund before it comes mandatory for all refund claims.

What does "perfect" mean? If a claim for refund is determined to be deficient or if information provided was insufficient, the taxpayer will have 45 days to provide missing information. If the IRS does not receive the information requested, the entire refund claim will be rejected.

By issuing this new guidance, it has put R&D refund claims back into the forefront of IRS audit scrutiny akin to a Tier 1 issue, making R&D refund claims more burdensome for a taxpayer. The IRS new requirements further demonstrate the need to utilize a qualified R&D tax credit professional to properly document all refund claims.

Press Release Authors: Lacey J.S. Robb, JD, LLM; Contributing Author: Alexander Bagne, JD, CPA, MBA, CCSP.

About ICS Tax, LLC:

ICS Tax, LLC (ICS) is a consulting firm providing innovative tax planning strategies. ICS collaborates with taxpayers and their tax professionals to identify credits and incentives that reduce tax liabilities and increase profitability. ICS provides nationwide service through its offices throughout the country.

To learn more about the R&D tax credit as well as other valuable tax ideas visit https://ics-tax.com/.

CITATION:

https://www.irs.gov/pub/irs-lafa/20214101f.pdf

In 2007, the IRS made the Research & Development (R&D) tax credit a Tier 1 issue, says ICS Tax, LLC (ICS). Tier 1 issues were those of high strategic importance that had a significant impact on one or more industries, essentially meaning that the IRS would audit taxpayers filing amended returns on such issues. To taxpayers' relief, the Tiered Issue Process was eliminated in 2012, effectively placing the R&D tax credit in the same audit pool as other issues.

Related link: https://ics-tax.com/

Brew Up Tax Savings with the R&D Tax Credit

BOSTON, Mass. /ScoopCloud/ -- While the trendy term "Microbrewery" may have been the proper terminology for new craft beer breweries and startups, they no longer remain "micro" in revenue, says ICS Tax, LLC (ICS). Growth in the craft beer industry in the U.S. has steadily grown to almost $30 billion.

While brewing up signature styles of beer is key to their creators' minds, the Research & Development (R&D) Tax Credit can save the craft brewing industry significant tax dollars and make brewers say, "Hop Hop Hooray."

The R&D Tax Credit has been an underutilized dollar-for-dollar cash savings in the brewery and beverage industry altogether. With the R&D tax credit being made permanent and the qualifications of R&D more expansive, the credit has become more valuable and lucrative for a small brewery or startup. A misnomer is that a company must be successful or is developing something new for the "world," whereas the activity only needs to be new or improved to the brewery itself.

The R&D Tax Credit can turn skunky brews into sweet aromatic tax savings.

"Ask yourself, while you may be known for your signature pale ale, have you been working on brewing up the latest lager to captivate the increasing market? Have you adapted your formulas for changing connoisseurs?" says Lacey Robb, the R&D credit practice leader at ICS.

She adds, "It is uncommon that your brewery has not made any improvements to the product, technology, or internal processes to grow and maintain success. Internal process improvements are often overlooked and provide valuable savings to the industry."

The benefits that the R&D Tax Credit can provide the brewing industry will not leave you with a hangover, but hopped up for exciting permanent tax savings.

A few examples of activities that would qualify for the R&D Tax Credit are:

* Developing new bottle conditioning

* Generating new or improved manufacturing processes to improve manufacturing flexibility and agility

* Establishing new or improved hopping techniques and styles

* Creating or improving filtration methodologies or wastewater methods

* Developing new or improved product formulations or recipes (e.g., dry hopping)

* Conducting tests of product ingredient mixtures for desired flavor or aroma profiles

* Developing new or improved quality assurance testing processes

* Producing prototype product samples for testing and validation of new recipe formulations

* Testing prototype samples for analytical and microbiological qualities.

While all the above sounds too good to be true, many breweries may be thinking, "how does this help us when due to the pandemic, we do not have a profit?" The R&D credit was enhanced for small business startups in 2016 and can be applied against your quarterly federal payroll tax instead of your income tax.

Do not let this opportunity go stale. Now may be the time more than ever to explore this power tax savings. To learn more about the R&D tax credit, visit https://ics-tax.com/services/research-development-tax-credits/.

ABOUT LACEY ROBB:

Lacey Robb is Principal for ICS Tax, LLC. She is an attorney with an LLM in Taxation and has helped numerous taxpayers in a variety of industries take the R&D tax credit. She can be reached by phone at 310-968-0970 or by email at laceyr@ics-tax.com.

ABOUT ICS TAX, LLC (ICS):

ICS Tax, LLC (ICS) is a consulting firm providing innovative tax planning strategies. ICS collaborates with taxpayers and their tax professionals to identify credits and incentives that reduce tax liabilities and increase profitability. ICS provides nationwide service through its offices located throughout the country.

Learn more at https://ics-tax.com/.

While the trendy term "Microbrewery" may have been the proper terminology for new craft beer breweries and startups, they no longer remain "micro" in revenue, says ICS Tax, LLC (ICS). Growth in the craft beer industry in the U.S. has steadily grown to almost $30 billion.

Related link: https://ics-tax.com/